Business Flashcards
How is a partnership formed?
Two or more people
Carry on a business in common
With the intention to make profit
No formalities required
If it’s unclear if a partnership has been formed, the sharing of profits is prima facie evidence (agreement to share loss is some evidence but not prima facie)
Actual authority can be granted:
Expressly in a partnership agreeement
Expressly from a vote of the partners
Or
Impliedly from partners’ failure to object to past actions
When does a partner have apparent authority?
A partner has apparent authority to carry on in the usual way business of the kind is carried on by the partnership unless: they had no actual authority to act AND the 3rd party knew they lacked actual authority or did not know they were dealing with a partner
Carrying on in the usual way of business is objective: would a reasonable 3rd party think a business of this kind would usually do this act?
What needs to be submitted to Registrar of Companies to register LLP?
Name of LLP (which must end in LLP or Limited Liability Partnership)
Location and address of registered office
Names and addresses of the members and who will serve as designated members (at least 2 people required as DM)
Details of people with significant control
What does an LLP need to do to change its name?
Deliver a notice of the change to the Registrar of Companies
Change becomes effective when the Registrar issues a certificate of the name change
When must the Registrar of Companies need to be notified of changes to LLP’s membership or designated members?
Within 14 days of the change
Who is a person with significant control?
Those holding more than 25% of surplus assets on winding up
Those holding more than 25% of rights to vote on matters to be decided on by members of LLP
Those holding the right to appoint or remove the majority of those entitled to take part in management
Or
Someone who otherwise can exercise significant influence or control over a trust or members of a firm that is not a legal person but meets any of the specified conditions in relation to the LLP
What is an unlimited company?
One whose members are personally liable for all the debts of the company
What is a company limited by guarantee?
Whose shareholders’ liability is limited by amounts they guarantee - typically used for non profits
What is a public limited company?
Whose shares may be issued to public generally, can list their shares on stock exchanges
Required to have minimum nominal share capital of £50,000
What does a promoter need to file for a company to be incorporated?
Memorandum of association - authenticated/signed agreement of persons wishing to become members of a company upon its formation procured by promoters
along with application for registration which must include:
-proposed name of the company
-location of its registered office
-details about the company’s business
-whether it will be limited by shares or guarantee
-statement of capital and initial shareholdings
—>total number of shares to be taken by subscribers
—>aggregate nominal value of the shares
—>if shares divided into classes, a description of each class
—>the amount that will be paid up but he shareholders and amounts left unpaid for shares
-statement of proposed officers/directors
-details of persons with significant control
-statement of compliance with Companies Act 2006
-the relevant fee
When will the veil of incorporation be lifted or pierced?
If the company form is being used to carry out fraud or avoid existing obligations
How many directors must a private company have?
At least 1
How many directors must a public company have?
At least 2
How quickly does Registrar of Companies need to be notified of new directors or changes to existing directors’ details?
14 days
De facto director
Acts as a director, claims to be one but has never been appointed
Still treated as a director
